Who’s Eligible for Relief in $25B Foreclosure Settlement?

Updated 01.07.2013:
The deadline to make your claim for compensation in the $25 billion National Mortgage Settlement stemming from wrongful foreclosures is January 18, 2013.
The settlement administrator mailed Notice Letters and Claim Forms in late September through early October 2012 to borrowers who lost their home due to foreclosure between January 1, 2008 and December 31 2011, and whose loans were serviced by one of the five mortgage servicers named in the settlement.
Throughout 2013, administrators and the nation’s top lenders are identifying homeowners eligible for cash payments, principal reductions or favorable refinancing terms under the landmark $25 billion settlement filed in February 2012 and approved by a federal judge two months later.
Due to its scope and complexity, the settlement will be executed over the next three years.
You can now access the secure claim filing site where you can submit your claim form.
You must have your personalized claimant ID number, which is located on the Notice Letter and Claim Form you received, to submit your Claim Form online.
From March 1 to June 30 of 2012, mortgage servicers provided a total of $10.56 billion in relief to 137,846 borrowers under the settlement. However, most of the relief has come in the form of short sales or “deeds in lieu of foreclosure.”
An independent monitor, Joseph A. Smith Jr, is overseeing compliance with the agreement.  Smith has served as the North Carolina Commissioner of Banks since 2002.
There are incentives for the five lenders – Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial – if they provide relief to homeowners within the first 12 months.  Servicers must reach 75 percent of their targets within the first two years.
The settlement provides assistance for:
» Homeowners needing loan modifications, including first and second lien principal reduction.  The servicers are required to eliminate up to $17 billion in principal reduction and other forms of loan modification relief nationwide.
» Borrowers who are current, but underwater, will be able to refinance at today’s historically low interest rates.  Servicers will have to provide up to $3 billion in refinancing relief nationwide.
Borrowers who lost their homes to foreclosure have no requirement to prove financial harm and do not have to release private claims against the servicers or the right to participate in the OCC review process. About $1.5 billion will be distributed nationwide to some 750,000 borrowers.
Borrowers who lost their home to foreclosure between Jan. 1, 2008 and Dec. 31, 2011, will receive claim forms for cash restitution. It is estimated that these homeowners each will receive on average $2,000.
If you believe you are eligible for relief, but are concerned you will be difficult to locate, please contact your Attorney General’s Office. They will collect and forward your information to the appropriate person to ensure you are contacted.
For loan modifications and refinance options, borrowers may be contacted directly by one of the five participating mortgage servicers.
However, you may contact the banks directly if you need additional information:

Loans owned by Fannie Mae or Freddie Mac are not included by this settlement.
You can visit the following sites to learn if either Fannie Mae or Freddie Mac owns your loan:
http://www.fanniemae.com/loanlookup
http://www.freddiemac.com/mymortgage
For more information about the mortgage servicing settlement, go to www.NationalMortgageSettlement.com.  To find your state attorney general’s website, go to www.NAAG.org and click on “The Attorneys General.”

3 thoughts on “Who’s Eligible for Relief in $25B Foreclosure Settlement?

  • February 9, 2012 at 6:45 pm
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    Do you have to have a current mortgage with one of the five banks to be able to refinance an underwater mortgage? Or is this settlement available to all people with underwater mortgages.

  • February 9, 2012 at 8:28 pm
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    There’s about 2 million homeowners who have mortgages with these lenders, or did when they defaulted, that are eligible, but it’s going to take months for them to contact these people.

  • February 18, 2012 at 4:12 pm
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    Unfortunately homeowners with mortgages owned by Fannie MAe and Freddie MAc are not impacted by the settlement. The problem with this is that Fannie and Freddie secure well over 50% of the mortgages in the country.
    Some estimates would have their combined securitization of mortgages as high as 80%. I don’t want to believe that this settlement agreement will impact a smaller part of 50% of distressed homeowners.
    http://www.docstowork.com/Bankruptcy-Blog.html?entry=national-mortgage-settlement-is-homeowner

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